Carney warns sector-specific tariffs will persist, urging vigilance as trade negotiations approach
North America’s tightly woven supply chains—and the certainty they provide—are under renewed threat, as US President Donald Trump makes clear that tariffs on key Canadian sectors will persist, regardless of the outcome of upcoming trade negotiations.
Prime Minister Mark Carney said the United States intends to continue targeting strategic industries with tariffs. These industries include steel, aluminium, autos, and forest products.
The US will maintain these tariffs even after renegotiations of the Canada-US-Mexico Agreement (CUSMA) begin next year, according to Bloomberg.
As per Carney’s remarks at a news conference in Ottawa, these sector-specific tariffs are unlikely to be resolved through a single trade agreement.
“There are certain sectors — steel, aluminium, autos, forest products, pharmaceuticals — [that] the Americans have decided are strategic and they have trade actions against everybody in the world,” he stated, emphasizing that Canada’s efforts are now focused on addressing these targeted measures.
During a recent visit to Washington, Carney and Canada-US Trade Minister Dominic LeBlanc met with Trump at the White House.
While Trump expressed confidence that the Canadian delegation would be “very happy” with the talks, LeBlanc later reported that no deal had been reached and that discussions for tariff relief would continue in the coming days, according to CBC News.
Trump also told reporters that tariffs on Canada would remain in place, stating, “we’ve always had tariffs between the two of us,” and questioned whether a renewed trilateral deal is necessary, suggesting the possibility of separate agreements with individual countries.
The implications for Canadian industries, particularly those reliant on cross-border supply chains, are significant.
According to Carney, North America’s integrated auto sector makes US manufacturers more globally competitive.
“For America to be fully competitive, to be globally competitive in autos, you need USMCA,” Carney said to business executives in Toronto.
However, he acknowledged that “not everyone shares that view at this time, and so that’s a real discussion”.
Industry data reported by the US Department of Commerce highlights the depth of integration: vehicles assembled in Canada typically contain at least 50 percent US parts.
Last year, the US exported US$29.5bn in auto parts to Canada while importing US$19.5bn, as per Financial Post.
Canada also remains the largest foreign buyer of American passenger vehicles and light trucks.
As per Carney’s assessment, Trump’s protectionist stance has permanently changed the nature of the Canada- US relationship.
“Our relationship will never again be what it was,” he said, as per Financial Post.
